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frank2403

What books pushed your day trading skills to the next level?

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Hey everybody! I just finished mastering the trade by John F. Carter and it really opened my eyes on a whole new level of day trading! So I was wondering what books did this to other people. I'll add to the list "trading in the zone by Mark Douglas" that gave me a lot of confidence when trading and turned my trading from negative to flat in my first two months of trading.

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Hi Francois ... just finished John F. Carter book, I skiped some chapters because they where not stocks related (mostly options, futures and forex) and with proprietary indicators make difficult to me to put them into practice. The most useful parts to me were on psychology and business plan. I´ll take a look again.

 

Now I´m reading "Come into my trading room" by Alex Elder.

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Yeah sure! First of all i'll say that the book is a bit overwhelming and it's not aimed at stock traders. The strategies used in this book are mostly for futures and he did a pretty good job explaining in details why he prefers trading them instead of stocks. What is great about this book if you are a stock trader is the way John wants you to think when you're trading. He is always thinking about beating the other traders instead of thinking about his moving averages and what not. The book also features a lot of strategies and technical indicators that were completely new to me. The book is heavy in information but it is very fun to read because you can feel the passion of John F. Carter trough his book. The man is crazy about day trading and is clearly a true master of the markets!

 

So that was my review of mastering the trade. I hope I hyped at least one of you enough to read it!

 

Alex I'll try this book too! Thanks for the idea.

 

Francois

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I also vouch for Trading in the Zone by Mark Douglas. It was a wake up call for me. The book completely changed my perspective on the psychology of trading and revealed how little I knew about my own emotions. After reading it, I am less hesitant to enter trades and willing to let go of losses much sooner. It all boils down to training your mind to believe in (with absolute die-hard conviction) the Five Fundamental Truths of Trading and Seven Principles of Consistency:

 

The 5 Fundamental Truths of Trading:

1. Anything can happen.

2. You don’t need to know what is going to happen next to make money.

3. There is a random distribution between wins and losses for any given set of variables that define an edge.

4. An edge is nothing more than an indication of a higher probability of one thing happening over another.

5. Every moment in the market is unique.

 

The 7 Principles of Consistency:

1. I objectively identify my edges.

2. I predefine the risk of every trade.

3. I completely accept the risk or I am willing to let go of the trade.

4. I act on my edges without reservation or hesitation.

5. I pay myself as the market makes money available to me.

6. I continually monitor my susceptibility for making errors.

7. I understand the absolute necessity of these principles of consistent success and, therefore, I never violate them.

 

Despite being very repetitive and dry in certain sections, I would highly recommend it.

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Hi Frank2403, I have found Adam Grimes' books to be very useful for understanding technical analysis. While his books aren't geared towards Day Trading specifically, there is a lot of technical information that can be gleaned from these books. I have also read Brian Shanon's book as well and found it to be very helpful. The "Trading Price Action" series by Al Brooks also offer a lot of information, but the style that it's written will make you crazy!

The Encyclopedia of Chart Patterns is also another good reference.

 

What you will find is that 90% of all trading books cover the same material as outlined by Robby above. They speak about emotions, setting rules, having a plan, and having an understanding of the market that you are trying to trade. This is all fine and dandy, but when it comes to strategy and methodology, that's where Andrew's book really shines. With all the technical analysis and fundamental analysis books I've read, they only cover the theory of trading. Andrew's book definitely gives you a lot of solid information.

 

While I don't think that Andrew's book is the end all be all", many books cover the same topics and premise. I encourage you to read as much as you can and take as many notes as possible but remember, it's all theory in the pages with perfect screenshots of what *should* happen.

 

Books on emotions are really helpful as well, such as "Overcoming the 7 Deadly Sins of Trading" but at the end of the day, unless you actually implement these concepts, you aren't doing yourself much good.

 

Let me know if you have any questions! There is a plethora of information when it comes to books out there and I've probably purchased or downloaded almost every trading book known to man!

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Wow thanks I will add all these to my list for sure! I just started welcome into my trading room yesterday and I like it so far. I think that every time that I finish a book (good or bad) I will make a review on the forum so everyone can compare notes and learn from one another. Plus if the book is bad it might save a lot of people time!

Anyway keep it up we are getting a pretty good library here!

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One additional take away I had from Trading in the Zone, was that the market is not responsible for my success. The market is not a thing that can be blamed. Take responsibility for all of your trades. Limit the loss on ones that don't go your way and extend profit on the good ones.

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I 100% agree! Since I read Trading in the zone I don't try to predict what the market is about to do since it's unpredictable. But it can only go up or down so I have a 50% chance of being right (plus a slight edge due to indicators) so I don't torture myself with 'reading' the market and just throw a tight stop loss on a good entry so my risk/reward ratio is super high. that way I still have a 50% chance of winning plus if I win I have at least 2 times what I risked so now my overall risk of losing money is getting pretty low. Anyway, the book does a better job explaining it with great analogies that make it really simple to understand. And you can't miss the message that he is trying to give because because he repeats it like 200 times trough out the book. It is annoying but these principles need to get in your head and stay there. To me this is the book that helped me the most so far!

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That's Trading in the Zone for me. After reading this, I can consistently achieve my target without much regret on doing wrong. The book has lots of repetition but as long as you capture the idea (summary on last chapter), you'll be on the way. I would recommend this to everyone who is still struggling to find way to consistently profitable trading.

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I've just analyzed my first two months in simulator and here is my equity curve before reading Trading in the Zone:

 

Before Trading in the Zone

Winning Trade Percentage: 40%

 

...and after reading Trading in the Zone:

After Trading in the Zone

Winning Trade Percentage: 55%

 

More importantly, my average win amount vs. average loss amount has doubled. It used to be $0.80 won for every $1 lost; now the ratio is $1.5:$1. The book has really instilled the confidence required to (1) pursue good setups without hesitation, and (2) get out with small losses.

 

I still have a long way to go before I am consistently profitable in a live account, but it's great to see that Trading in the Zone has made a measurable, quantitative impact on my paper trading results. Can't recommend this book enough!

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Cory Mitchell, a Canadian trader publishes a blog on day and swing trading mostly forex but also futures and equities. I enjoy reading his articles a lot and have learned a lot from them:

https://vantagepointtrading.com

There's a lot of individual articles he has published and updates regularly across his website that's available for free and then some paid e-books where all the information is collated and a bit easier to study. He also swing trades equities and futures and a lot about financial and risk/leveraging those kind of accounts/trades can be better learned about by using the detailed guides.  

He's a chartered market technician so a lot is about trading classical chart patterns. It's intuitive and can also be fun if you enjoy studying charts and price action. Like Andrew he doesn't like to mark up charts  with the kitchen sink of indicators but rather focuses on candlesticks, volume and key support and resistance levels.

If long term  swing trading is an interest it's useful to study  other  markets so you don't have too many long term swing trades in highly correlated equities (just overlay FANG stocks SPY, Russell and QQQ Nasdaq and you know what I mean). You can do that with limited cash in forex and futures. Shorting forex and futures bearish trends also tends to be less volatile.

 

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